Even Aware Unmoved
Of the 39% who were aware of the PPA, 76% said it has no impact on their plans to offer a 401(k) plan to their employees, according to a news release on the survey. However, while the permanency of the expanded contribution and benefit limits under EGTRRA do make some aspects of offering a retirement plan more advantageous for small business owners, this might not be the best selling point for this audience. Consider that a mere 25% said they plan to use a 401(k) to fund part of their retirement income, possibly because these owners have private savings, or plan to use the money from selling their business as retirement income.
Less than 40% of small business owners offer any form of a retirement program to their employees and only 14% of the respondents currently offer a 401(k) plan to their employees – an obviously untapped market for advisers to prospect. Advisers can help small business owners understand the importance of company-sponsored 401(k) plans and other retirement benefits in supplementing our Social Security system.
For employers who don’t want to offer a 401(k) plan to employees, advisers can help them review the many other retirement plan possibilities that might better suited for their workforce, including defined benefit plans and IRA based programs.